VENTURE INTO THE WORLD OF INDUSTRIAL ROTATING EQUIPMENT. No 4_March Power Generation

Transcription

1 VENTURE INTO THE WORLD OF INDUSTRIAL ROTATING EQUIPMENT Power Generation s No 4_March 2006 FOCUS TAKING A GIANT LEAP IN SUBSEA TECHNOLOGY MONITOR THE MISSING LINK MINDSET A MATTER OF ATTITUDE SPOTLIGHT BRIGHT NEW DAWN FOR COGENERATION

2 Dear Reader, Acquisitions, joint ventures and stategic partnerships are often seen from their purely economic aspects. In many cases, however, they are the lever that provides the ingredients for an evolution or even a revolution of the technologies of the partners. They have the capability to evolve into new technologies and solutions for the industry. In this issue of Venture, we travel to Oslo, Norway, where FMC Kongsberg Technologies and Siemens have signed an agreement to jointly develop solutions for tomorrow s challenges of subsea oil & gas production. Photo: Florian Sander We venture ashore in North Holland, where an innovative, but field-proven compression solution is being installed to power the Bacton-Balgzand-Line (BBL), a pipeline designed to deliver volumes of European and Russian gas to the UK from December 2006 onwards. Health, safety and environmental performance are fundamentals in many of the demanding environments we work in today. Throughout Siemens PG I, a comprehensive program is currently being implemented to cultivate an attitude of uncompromising HSE compliance. Finally, we take a look at the future of cogeneration, which, after a period of relative dormancy, is now gathering a lot of interest outside of Europe, too. Have a good read! Dr. Frank Stieler, President Siemens Power Generation Industrial Applications Division

3 V E N T U R E M A G A Z I N E _ M A R C H _ E D I T O R I A L _ I M P R I N T _ 0 3 Inside NEWS FLASH Around the World Projects in China, Germany and Hungary and a gas turbine s 50th anniversary. 04 FOCUS Taking a Giant Leap in Subsea Technology FMC Technologies and Siemens Power Generation join forces to develop and market solutions for subsea oil and gas recovery. 06 FACES Tore Halvorsen Vice President/Managing Director of FMC Kongsberg Subsea AS. 10 MONITOR The Missing Link A new natural gas pipeline is currently being built to link the UK and the European Continent. The compressor station at Balgzand, Netherlands, will be powered by a state-of-the-art Siemens-built compression solution. 12 MINDSET A Matter of Attitude Accepting responsibility for Health, Safety and Environmental performance (HSE) has become a core value of corporate policy. Cultivating an HSE mindset is the only way to go. 14 SPOTLIGHT Bright new Dawn for Cogeneration After a snail-like rate of progress for more than a decade, the benefits of Combined Heat and Power (CHP), cogeneration or cogen technology are becoming widely recognized. 16 DATELINE Trade Shows, Conferences, Seminars March 2006 to May IMPRINT Publisher: Siemens AG, Power Generation Industrial Applications, Wolfgang-Reuter-Platz, Duisburg, Germany Responsible: Dr. Uwe Schütz Editorial Team: Lynne Anderson (Head), Manfred Wegner Contact: lynne.anderson@siemens.com Contributing Editors: Colin Ashmore, Eric Jeffs Design: Formwechsel Designbüro, Düsseldorf Photography: Florian Sander Illustration: Lorna Egan, Ji-Young Ahn Lithography: Time Production, Düsseldorf Printing: Heining & Müller GmbH, Mühlheim a.d.r SIEMENS AG. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical photocopying, or otherwise, without prior permission in writing from the publisher.

4 0 4 _ N E W S F L A S H *1 *1 Fortunate providence: Siemens is continuously expanding supplies of advanced compression solutions to the Chinese market. *2 Brand new technology: CAD impression of Siemens latest SGT5-800H gas turbine. Photos: *1: Florian Sander; *2 and *4: Siemens; *3: Corbis. *2 *3 *4 *3 Keeping wintery Budapest warm: Three of Siemens newly-configured gas turbinedriven pipeline compressor packages have been ordered by MOL Natural Gas Storage. *4 A seasoned workhorse: The original Victor GT35 from 1955.

5 V E N T U R E M A G A Z I N E _ M A R C H _ N E W S F L A S H _ 0 5 Around the World *1 *2 CHINA SIEMENS TO DELIVER TURBINE-COM- PRESSOR STRINGS TO ETHYLENE MEGAPLANT The ethylene plant at Dushanzi, in North-West China, being built by Linde AG under contract to PetroChina International, is set to be the biggest in the country. It is scheduled to be in full production by the second half of 2008, generating synthetics for the plastics industry, and will have the capacity to produce one million tonnes of ethylene and 500,000 tonnes of propylene per year. It is to this plant that Siemens will deliver totally six compressors and three steam turbines. Five single-casing horizontally split compressors (STC-SH) and one vertically split compressor (STC-SV), designed for a maximum suction volume of up to 480,000 cubic meters an hour, will be driven by three SST-600 industrial steam turbines. The units will be used to compress raw gas to fabricate ethylene and propylene. This contract highlights our growing presence on the booming Chinese market, emphasized Dr. Peter Langer, Head of the Compressor business in Duisburg, and is a tribute to the excellent customer relationships we enjoy with Linde AG and PetroChina International. It also puts Siemens firmly on the map to benefit from the rapid expansion of the global production of ethylene. Icis estimates that in the year 2009, China alone will achieve an ethylene production of more than 4.5 million tonnes, more than four times the estimate for During the same period, the demand for propylene is reckoned to increase by a factor of ten to 2.3 million tonnes. GERMANY E.ON ENERGIE AND SIEMENS JOIN FORCES IN INNOVATIVE GAS TURBINE POWER PLANT PROJECT E.ON Energie and Siemens are to implement a new power plant project at E.ON Energie s Irsching site in Bavaria, Germany, which will set new benchmarks in terms of performance and operating economy. As a first step, Siemens will build a newly developed gas turbine with a capacity of 340 megawatts (MW), the world s largest and most powerful gas turbine, to be known as the SGT5-8000H. After a test phase, the gas turbine will be incorporated into a high-efficiency combined-cycle power plant with a capacity of approximately 530 MW and an efficiency of over 60 percent. After successful trial operation, E.ON Kraftwerke GmbH, a subsidiary of E.ON Energie, will take over the plant for commercial operation. The SGT5-8000H gas turbine will set new standards for environmentally compatible, economic power generation. Existing combined-cycle plants in Germany currently attain maximum efficiency levels of 58 percent. The efficiency increase to over 60 percent will set a new world ranking, and, of course, also lead to lower genera- *3 tion costs. The new plant will create about twenty new jobs at the Irsching site. Work performance and material purchases locally will provide a positive impetus for the regional economy. HUNGARY FIRST STANDARD PIPELINE COM- PRESSOR PACKAGES GO TO MOL MOL Natural Gas Storage of Budapest in Hungary have ordered three newly-configured standard gas turbine-driven pipeline compressor packages, based on the 4.9 MW SGT-100 gas turbine in combination with a direct-driven STC-SV compressor. The units will be installed at Hajduszoboszlo, Hungary. The pre-engineered standard packages, which have been designed for maximum efficiency and economy, will be known as SPCP (Siemens Pipeline Compressor Package). Three package types are available, based upon gas turbine size, SPCP-100/200/400, all proven components from the Siemens portfolio. The package delivery is a natural extension of the single-source supply thinking which characterizes Siemens deliveries to the Oil & Gas market. *4 ANNIVERSARY VICTOR CELEBRATES HIS 50TH BIRTHDAY 25 October 1955 the first GT35 gas turbine (now called SGT-500) was started in Finspong, Sweden, and was inaugurated commercially in August Not only the first GT35 but the first gas turbine ever produced in Sweden was born and functioning. Steam turbines had been produced since the turn of the century, but gas turbines were the fledglings to the market, resulting from aeroengines developed during WW II. This became the first stationary large-scale gas turbine (10 MW), and was christened Victor to celebrate its triumphant creation. Originally intended to be a peak load machine, over time the turbine became a veritable workhorse. It has continued to be developed, now producing 17 MW power and some impressive operation statistics. Up to mid-december , 814,772 operation hours and 182,743 starts had been registered. Now known as the SGT-500, the world s oldest gas turbine sold commercially as a new product is still going strong. It has become a bestseller with oil companies for use both onshore and offshore, thanks to its reliability and low maintenance costs, and its eminent and proven fuel flexibility. Three Victors have just been sold for power supply to Dubai airport, and he is at the heart of the newly developed COGES system for marine application. The Victors in the field will keep chugging along for a good few years yet!

6 Taking a Giant Leap in Subsea Technology In a groundbreaking co-operative agreement between FMC Technologies and Siemens Power Generation, the two companies are to jointly develop and market solutions for subsea oil and gas recovery. At the heart of the latest technological development is an electrically-driven centrifugal compressor developed in a joint initiative between Shell and Siemens. The new system will operate continuously on the seabed allowing efficient, economic and environmentally friendly recovery of oil and gas at even the most extreme depths. An artist s impression of a typical subsea installation for natural gas production.

7 V E N T U R E M A G A Z I N E _ M A R C H _ F O C U S _ 0 7 We all live in an energy-hungry world. The health, wealth and political stability of nations around the globe are inextricably linked to the availability of plentiful, affordable sources of energy. Highly industrialized countries in the western hemisphere and rapidly growing economies around the world are alike in their seemingly insatiable demand for fuel and energy which is continuing to grow at an ever faster rate. LOOKING TO THE FUTURE At the same time that consumption of both oil and natural gas is spiraling upwards, many of the world s major existing oil and gas reservoirs located either onshore or in relatively shallow water offshore are in decline, and the forces behind the international oil and gas business are having to look for innovative solutions. With the low-hanging fruit all but picked by the oil companies as their onshore and more accessible offshore oil and gas fields mature, operators are now scrambling to find new reserves, often in the form of smaller, stranded reservoirs or in locations where resources are physically and economically difficult to extract. THE NEXT STEP In the new deep and ultra-deepwater operating environments and in Polar Regions where sea ice exists year-round, production strategies based on the use of surface structures are either impractical, environmentally harmful, or are becoming prohibitively complex and expensive. One solution has been to replace fixed platforms with FPSOs Floating Production, Storage and Offloading vessels, giant combined floating factories and storage tankers, capable of operating in the deepest waters with long tie-back distances from multiple wells. Now, in what has been described as the next logical step, as well as moving away from fixed platform systems the industry is looking ultimately to replace even these high-tech surface vessels by moving the production process to the sea floor. MARKET LEADERS On November 4th 2005, Tore Halvorsen, Managing Director of FMC Technologies Kongsberg Subsea business unit, and Klaus Voges, President of Siemens Power Generation, signed an agreement between their two companies to develop and market joint solutions Illustration: Lorna Egan

8 0 8 _ F O C U S for subsea oil and gas recovery. As a next step for the energy industries, but representing a giant leap in offshore technology, the two companies will jointly develop the subsea systems forming a new generation of hydrocarbon production and processing plants installed on the sea floor. A global leader in energy industry and other industrial applications, US-based FMC Technologies Inc is a US$2.8 billion company, supplying a wide range of products and services on a global scale. Its subsidiary FMC Kongsberg Subsea AS is the acknowledged global leader in the manufacture and supply of subsea production systems. YELLOW SUBMARINES In an environment only dreamt of by Jules Verne, although not quite reaching Captain Nemo s 20,000 leagues beneath the sea, the new-generation intelligent production and processing plants being developed, manufactured and marketed by the partnership will operate in a world more alien and less well explored than the moon. The size of a small city block and painted in a bright yellow finish for optimum visibility, these sea floor factories will be installed and very occasionally serviced by robots, in the total darkness, sub-zero temperatures and crushing depth of the seabed nearly 2 miles below the surface. SPACE-AGE TECHNOLOGY Not only designed to operate in inner-space under unbelievably harsh conditions, the electrically-driven machines are being engineered to compress the raw, wet, dirty natural gas which is also typically mixed with hydrogen sulfide and other highly corrosive gases, directly from an undersea reservoir. Adapted from Siemens conventional existing compressors, but using the very latest materials and technologies, the subsea compressor system employs a high-speed induction motor developed from an Model of a typical subsea compression facility. Photos: Florian Sander

9 V E N T U R E M A G A Z I N E _ M A R C H _ F O C U S _ 0 9 Components for advanced subsea solutions manufactured at FMC Kongsberg Subsea AS existing design at Siemens Berlin facility, powered through a variable-speed drive system. The stator uses liquid cooling and the integrated squirrel-cage rotor is equipped with maintenancefree magnetic bearings. The design eliminates the need for seals between motor and compressor housings and the entire machine is contained within a hermetically sealed pressure casing. Despite its space-age technology, the compressor uses an essentially simple, highly robust modular construction, enabling it to operate with total reliability, continuously, 24-7, 365, for a minimum of five years without maintenance of any kind. IT S A GAS FOR NORWAY The initial development contract for the subsea compressor was signed originally in November 2001 between Siemens PG and Shell in the Netherlands. Norske Shell will be operator of the giant Ormen Lange gas field, where the first subsea production and processing system will be installed. Development operator for the field is Norske Hydro. Discovered in 1997 and located in the Norwegian Sea some 140 kilometers west of Kristiansund, with recoverable reserves of more than 315 billion cubic meters, the giant natural gas field is the second largest ever discovered on Norway s continental shelf. With factory testing now completed, June 2006 will see an onshore version of the technology being field-tested in the Netherlands. Subject to final decision in 2010, a fully commercial system incorporating four compressors, each with an electrical power rating of 12.5 megawatts, will be installed at a depth of 895 meters at the Ormen Lange field in The new system will be remote-controlled from the onshore facility 140 kilometers away, through an underwater umbilical cable, which will also carry the high-voltage AC electrical power to the compressors. UNDER THE ICE Even before the first commercial systems sink into the cold black depths beneath the Norwegian sea, further applications are already being planned together with other operators. Although this recordbreaking, world-first installation will be a major achievement for the industry, the ability to transfer critical production systems to the seabed at large distances from any onshore facilities will also allow the recovery of previously untapped oil and gas resources in the Polar Arctic regions. Installed either below permanent ice or where ice movement presents a major hazard to any fixed platform or floating surface production facility, arctic subsea systems are already also planned for installation by Minimizing environmental impact, slashing production costs and enabling the economic recovery of stranded reserves of oil and gas, the pioneering development of subsea compressors as vital elements of the new generation of intelligent seabed processing systems will help to keep supplies flowing for as long as they are needed.

10 Tore Halvorsen, Vice President/Managing Director, FMC Kongsberg

11 V E N T U R E M A G A Z I N E _ M A R C H _ F A C E S _ 1 1 The Norwegian Connection Returning to his office at the company s headquarters in the old silver-mining town of Kongsberg, among the mountains and pine forests some 70 km west of Oslo, Tore Halvorsen, Vice President/Managing Director of FMC Kongsberg Subsea AS talked to VENTURE after the official signing ceremony. Venture: Mr Halvorsen, as the market leader in this niche sector of the offshore engineering industry why, exactly, did you choose Siemens to partner FMC Kongsberg? Halvorsen: Well, as you probably know, our two companies are not exactly strangers, as we were once owned by Siemens, although there have been some very major changes within the company since then. However, today we are convinced that as both our organizations are now clear market leaders in their own fields, they are now a perfect fit with each other. My company has built up a huge knowledge base in subsea engineering systems for oil and gas production, while Siemens PGI brings to the party its own innovative technical excellence. Venture: I guess you are referring specifically to the new compressor, but surely there are a number of other companies who are active in this field? Halvorsen: Yes, there are, but we believe that Siemens development is outstanding. It s conservatively rated and essentially simple and robust, but uses the highest quality materials and latest technologies to provide the continuous, long-term, maintenance-free reliability essential for subsea applications. It also includes some very clever features that the other manufacturers products just can t match, giving us a clear technical edge over the competition. Venture: I see. So given this competitive edge, what are the market prospects for the system? Halvorsen: In a word: excellent. The latest offshore gas field developments are already being designed without topsides production systems, using subsea installations instead. This trend is definitely going to continue, particularly as the industry moves into ever-deeper water operations such as in the Gulf of Mexico, East Africa, Brazil and of course difficult areas like the Arctic. Venture: You re not just looking at new deepwater installations in big new fields, though, are you? Halvorsen: No. It s important to remember that this new generation of subsea production systems also enables the life of mature oil and gas fields to be extended where it is becoming more and more difficult to maintain production using conventional methods. Placing the compressor really close to the well is one of the most costeffective ways of enhancing recovery. The advantages don t stop there, though. We can now place a production unit right next to a trunk undersea pipeline, allowing valuable reserves to be extracted from smaller, previously uneconomic stranded gas fields, and plugging them straight into the transmission system again prolonging the life of the main field and boosting available reserves at the same time. Photo: Florian Sander Venture: And what of the future? Halvorsen: Well, I suspect that we will be seeing subsea installations moving further and further offshore, making it necessary to look hard at long distance power transmission systems using high-voltage direct current, or floating power stations, perhaps. Even further ahead who knows? We might even be installing dedicated power plants on the seabed, perhaps applying fuel cell technology using the natural gas as the fuel, but this is just speculation. What I do know is that we have world-beating technology, and through our new partnership we have the vision, the products and the expertise to maintain our position as the best in the world. Venture: We ll toast to that!

12 1 2 _ M O N I T O R The Missing Link Connecting the British Isles and the European Continent, the first natural gas pipeline is currently under construction between Balgzand, Netherlands, and Bacton, UK. It runs some 230 kilometers across the seabed of the North Sea and will be powered by a Siemens-built state-of-the-art compression solution. Recent predictions from the UK Depart- Bacton Line) pipeline will provide that even play an important role in connecting ment of Trade and Industry/Ofgem indicate missing link. Russian gas volumes to the UK. that after decades of generous consumption and export of domestic fossile energy the UK s energy import dependency could increase significantly beyond Studies suggest serious supply-side challenges if the UK Continental Shelf (UKCS) production rate decreases as expected. Specifically, the UK gas balance will be likely to show imbalances until 2007 and in 2010 and beyond. And gas is continously replacing oil as the major primary energy. Against this background the European Commission has identified that one of the missing links in the main gas infrastructure is an interconnection between the Netherlands and the UK. Designed to bring gas from continental sources to the United Kingdom via a route of just 235 kilometers, the proposed BBL (short for: Balgzand TEAMING UP In July 2004, the utilities Gasunie (Netherlands), E.ON Ruhrgas (Germany) and Fluxys (Belgium) decided to establish the BBL Company through legally separate subsidiaries. Gasunie's subsidiary company will hold a 60 per cent stake, whereas the subsidiaries of E.ON Ruhrgas and Fluxys will each hold 20 per cent. With an investment of some 500 million euros, the BBL Company will link Anna Paulowna in the Netherlands and Bacton on the Norfolk coast through a 36-inch pipeline. Operational by the end of 2006, it will substantially add to the 16.5 billion cubic meters per year, which the existing Interconnector pipeline between Zeebrugge, Belgium, and Bacton could supply in UK import mode. In the more distant future, the BBL may GETTING STARTED Groundwork, pipeline laying and construction work at the terminals is well under way, and so is the production of the compression solution for the Balgzand terminal. Encompassing three state-of-the-art compressor strings rated 23 megawatt (MW) each, it will step up gas pressure to approximately 120 bar for the gas to travel the 235 kilometers to the Bacton terminal. Key performance requirements included an extended operating area to cope with potential swings in demand, as well as lowmaintenance, fully remote-controlled operation. A FINE PIECE OF TECHNOLOGY Designed and manufactured at Siemens facilities in the Netherlands and Germany, Illustrations top left and right: Courtesy of BBL Company. Photo: Florian Sander

13 V E N T U R E M A G A Z I N E _ M A R C H _ M O N I T O R _ 1 3 In order to avoid any adverse impact on the sensitive ecosystem of the sand dunes, horizontal directional drilling will be used to bore a shaft beneath the dunes through which the pipe will be pulled, leaving nature unscathed. the compressor strings feature high-speed variable-speed motors which directly drive multi-stage centrifugal compressors. Motors and compressors are fitted with active magnetic bearings. Through a smart computer-controlled management of bearing stiffness and damping properties, minimal vibration is ensured at critical speeds to provide the required wide operating area. The strings are equipped with a digital control system for full remote control and integration into Gasunie s dispatching center in Groningen, Netherlands. Says Etienne Meier, Project Manager with Siemens in Hengelo: The machines do, indeed, mark the state of the art in smart turbomachinery. However, we have amassed considerable routine with all the technologies involved, as we have designed a number of similar machines in recent years. And they ve all passed the acid test of proof in operation with more than satisfying results. It was because of that vast experience with similarly advanced units that Siemens were awarded the contract to supply the Balgzand compression solution. Notably, BBL Company were familiar with the machines we delivered for NAM s GLT project. They have lived up to all expectations, Meier continued. NAM is a joint venture of Shell and Exxon Mobil, operating the Groningen Long Term (GLT) gas fields, where some 500 MW of compressor performance are being successively installed at 29 clusters. TIGHT SCHEDULE AHEAD By the end of January, the first of three strings has successfully passed comprehensive performance tests and has been released for shipping. Strings #2 and #3 will follow in March and May, respectively. The first two units will be up and running before 1 December 2006 the day when commercial operation of the BBL pipeline is scheduled for start. Until then, installation on site and commissioning have to match a challenging schedule. Says Etienne Meier: Flexibility is a value we share with our machines. And smiles. Building reputation: one of the smart compression solutions installed at a NAM GLT compressor station near Groningen, Netherlands.

14 1 4 _ M I N D S E T A Matter of Attitude Accepting responsibility for Health, Safety and Environmental performance (HSE) has become a core value of corporate policy. Dedicated management structures are put in place with a keen goal setting of zero incidents. Elaborate educational programs are indispensable, as the single most important factor is the human mindset. Throughout the oil & gas industry, first-time visitors are invited to a compulsory video presentation before being admitted to a potentially hazardous area. Different as they may be in terms of aesthetics, these induction videos convey a clear message: Stay alert, stay alive. Once access is granted, the newly sensitized eye discovers the semiotics of an intricate HSE signage system. What to do, what not to do, which path to follow, where to gather in case of an incident, whom to report to it is all thought of and visualized. However, this is just the visible tip of an iceberg, the iceberg being a vast corpus of occupational health, safety and environmental protection regulations and practices issued and enforced by regulatory bodies and public authorities. ASSUMING RESPONSIBILITY While HSE started as something like a technical directive, in recent years it matured to a comprehensive management system and became a core value of corporate policy at oil & gas majors worldwide. After all, the nature of their business and of the chemical industry, who pioneered HSE requires that HSE has the uncompromising commitment and support of the management. Says Frank Stieler, President of Siemens Power Generation Industrial Applications (PGI): At Siemens, HSE is never a mundane chore. Our management assume personal responsibility to ensure the health and safety of people inside and outside of the company, and to avoid any adverse impact of our business activities on the environment. The policy currently being implemented throughout the company will bring all sites and employees to the level of HSE awareness and practices defined by the most stringent standards of the industry. CONTINUOUS EDUCATION Of course Siemens holds international certificates such as the environmental ISO and the OHSAS for health and safety. But as Mike Peto, responsible for HSE at Siemens PGI, says: These

15 V E N T U R E M A G A Z I N E _ M A R C H _ M I N D S E T _ 1 5 If we want to compete for business opportunities, we must bear comparison with the best in the industry. Mike Peto, Health, Safety and Environment (HSE) coordinator of Siemens PG I. are a good base, but no laurels to rest on. Correct HSE behavior has to become part of our working life. Which is what Gordon J. McDonough, HSE coordinator at Siemens Service Center in Trenton, U.S., so imperatively coined: Arrive safely, work safely and return safely home. Gordon explains: Much of what we do, we do with the uncanny sureness of a somnambulist. So sensitizing people s mind is key to the success of any HSE program. A smoker who takes a small step in the right direction may be making a giant leap for the safety of many others. HSE requires permanent attention and education. Safety takes priority over comfort, Mike Peto comments. REVEALING STATISTICS It is a common experience that, once properly trained, selective perception can work very much in favor of a positive goal. For instance, when sensitized to identify risks in their working environment, employees suddenly report a much greater number of socalled near misses. Statistical evidence says that 500 near misses equal one incident. Incident may as well read accident, says Horst-Guenter Schaefen, HSE coordinator of Siemens PGI s Global Field Service. A statistical datum of 500 near misses may actually stand for one and the same hazard encountered 500 times. It may refer to something as trivial as a pit at a construction site easy to jump over. But jump no. 501 may be fatal. The message is simple: cover the pit. Or: do it right the first time, every time. DEMANDING PARTNERSHIP HSE doesn t start and end in any single company. Once construction or service work is done on the premises of another company, a basis of common understanding in all HSE-related issues has to be ensured. Originating from the Benelux states and Germany, the Safety Certificate Contractors (SCC) provides such a basis. It is a management system widely applied in today s oil & gas industry, and without SCC, no employee of company A would be allowed to work on the premises of company B. In addition, company or site-specific certification is often required, including compulsory refresher courses at defined time intervals. At Siemens, these are documented in the Personal Safety Logbook (see title photo) of every employee concerned. GOING BEYOND While SCC defines demanding standards, HSE requirements of some companies go far beyond. This is particularly true for the top segment of oil & gas producers companies which are always in the public eye. As a consequence, Mike Peto says, not only do they set the highest standards for themselves, but they expect the same of their suppliers. For Siemens as a leading supplier to that industry, this gives a clear heading. Mike Peto: If we want to compete for business opportunities, we must bear comparison with the best in the industry. As a consequence, Siemens don t just aim to meet legal minimum standards, which often vary among countries. Even more relevant are international standards, which go beyond legal requirements, says Peto. It is Siemens policy to work in accordance with the highest locally applicable standards. By the same token, Siemens applies these standards to its contractors. CULTIVATING AN HSE MINDSET HSE is not a one-off program. Besides the involvement of top management, dedicated management structures, and efficient means of reporting and analysis, it needs persistence in spreading the message that constructive communication among all related people and parties is an indispensable prerequisite for improvement. Anything relativizing the keen goal of zero incidents would mean a step in the wrong direction. Cultivating an HSE mindset is the only way to go. After all, we all want to return home safely.

16 1 6 _ S P O T L I G H T Bright new Dawn for Cogeneration After a snail-like rate of progress for more than a decade, the benefits of Combined Heat and Power (CHP), cogeneration or cogen technology as a very high-efficiency, low-carbon source of energy are now starting to be widely recognized, not just throughout Europe, but on a larger international scale. As a means of developing a more sustainable energy future, this mature system for converting primary fuels into a combination of electricity and useful heat is now growing rapidly in importance. Despite the growing numbers of wind turbines, biomass-burning power stations, solar panels and other sources of so-called renewable energy, the electricity-generating sector has a huge environmental footprint. The majority of this footprint is due to atmospheric emissions of carbon dioxide, the greenhouse gas now widely believed to be responsible for global warming. In the UK alone, every household releases into the atmosphere an average of 10 tonnes of CO2 every year, much of which is from the use of electricity from fossilfuelled power stations. While individual efforts to reduce consumption and use electricity more wisely are entirely commendable, it remains a little-known fact that from fuel input to electricity used by all consumers, the average efficiency of supply has not improved beyond just 33 per cent for the last 20 years. In other words, two-thirds of all the fuel burned in power stations around the globe is simply wasted, just adding to the enormous annual tonnage of carbon dioxide and other pollutants being poured into our overloaded atmosphere. Delivering 140 MW of electricity and 150 MW of district heating: the new Siemens built TEC1 CHP plant of the Latvian capital of Riga. BIG SAVINGS Energy conversion systems based on Combined Heat and Power (CHP) technology are without question the most efficient and effective way of converting hydrocarbon-based fuels into electricity and thermal energy. Systems based on both conventional fossil fuels and biomass are widely used in Europe, providing 13% of all electricity and heat, saving 280 million tonnes of carbon dioxide and 1,500 petajoules of energy each year. In simpler terms, this saving is equivalent to the total energy consumption of the whole of Portugal, Estonia, Luxembourg and Malta combined. RAISING EFFICIENCY Unlike other forms of thermally generated power, where only a relatively small proportion of the total available heat energy from the hydrocarbon fuel is converted into electrical energy, CHP systems are designed to use almost all the available heat, enabling operating efficiencies to soar above 85 per cent. Some of the thermal energy is converted into electricity, frequently using modern, high-efficiency gas turbine-driven generators, with the exhaust heat captured efficiently by a large heat exchanger to produce steam. This can either be used directly as a source of high-grade heat for an

17 V E N T U R E M A G A Z I N E _ M A R C H _ S P O T L I G H T _ 1 7 Steam turbine Generator Waste heat recovery unit Generator 55% Heat exchanger Gas turbine A typical cogeneration scheme achieving an overall efficiency of some 80 per cent. urban district heating network or for an industrial process, as was recently done at GOING FOR GREEN Spearheaded by Siemens and other world- power plants operated by European municipal energy utilities are dwarfed by some of the Girvan, Scotland, whisky distillery of leading power engineering innovators, the latest cogenerating installations in the William Grant & Sons, one of their largest high technology systems and equipment Middle East. Based on five huge SGT5-4000F and most important investments in new are being developed continuously to meet gas turbines and two steam turbines, the Al technology in recent years. External supply the challenging demands of today s new Shuweihat power and desalination plant had begun to form a major and rapidly-in- breed of lean green producers and users was constructed by Siemens on the Gulf creasing percentage of the company s total of electrical power and heat. These include coast in the United Arab Emirates. The production costs. The integration of a gas- the world s major power utilities and oper- largest and most efficient of its kind in the turbine driven CHP solution into the facili- ators of large centralized CHP facilities, world, the giant plant feeds 1,500 MW of ty now gives Grant complete control over such as Latvenergo, the energy utility oper- electrical power into the region s electricity their process and their power costs. The ating the new Siemens SCC x 1 pow- grid and supplies steam to power a desali- steam can also be used to provide lower- er plant in Riga, Latvia, feeding 140 mega- nation system, producing pure drinking- grade heat and hot water after first driving watts (MW) of power into the grid and 150 water from the sea at the astounding rate a steam turbo-generator to produce addi- MW of heat into the city s district heating of 455 million liters per day. Photos: Florian Sander Illustration: Ji-Young Ahn tional electricity. Alternative to a gas turbine, the basic fuel which may range from natural gas to renewable biomass can be combusted in a modern, ultra-clean boiler, producing steam to power a turbogenerator and providing additional process heat. For a given output from all types of combined heat and power generating plant, both fuel consumption and atmospheric emissions are reduced very significantly, providing an efficient cost-cutting solution for the power utility or industrial operator. system. No less than a quarter of the generating capacity owned and operated by Essent Energie, the Dutch power utility, is centered on combined heat and power installations. There are many similar installations throughout Western Europe and Scandinavia based on Siemens gas turbine and steam turbine technologies, providing base-load power and district heating. PLAYING IN THE MAJOR LEAGUE While imposing, the centralized heat and BOOSTING DE AND CHP Alongside the big players in the centralized energy arena are the growing numbers of power producers operating within the decentralized energy (DE) sector. At the end of 2004, DE systems worldwide accounted for a total of nearly 282 gigawatts of electricity (GWe), the majority consisting of highefficiency cogeneration systems, mostly fuelled by coal, natural gas and to a lesser extent, biomass-based fuels. The European

18 The energy efficiency of combined heat and power is a competitive benefit in a high energy-price environment. CHP will be helped more than hurt by high fuel costs. John Jimison, Executive Director of the US Combined Heat and Power Association market for commercial and industrial com- bagasse sugar-cane waste in India and clean energy portfolio standards and tax bined heat and power systems has grown many other countries which produce this credits for CHP. The combination of these at a snail s pace over the last ten years and crop. measures, together with the memory of been essentially flat for the last five. However, encouraged by the EU Cogeneration Directive in 2003 and the launch in GOING FOR GROWTH IN THE USA Although the tripling of gas prices in the recent major supply outages and rising power prices, is certain to boost the cogeneration market, offering huge new oppor- January 2005 of the EU Emissions Trading USA in 2002 effectively halted the growth tunities for developers and suppliers. Scheme, market activity is once again on a of its cogeneration market, recent moves at gentle upward curve, boosted additionally both Federal and State levels look set to "It's true that soaring and highly-volatile by the increasing cost of electricity in give the industry a major shot in the arm. natural gas prices have hurt the U.S. CHP Europe. The combined heat and power A number of States, notably California, market, says John Jimison, Executive installation now under construction at the New York and Texas have been reducing Director of the US Combined Heat and Rauma paper mill in Finland is typical of backup charges and barriers to grid-inter- Power Association. Like all energy-con- today s new clean and highly efficient dedi- connection, while others have initiated suming investments, you can t have confi- cated industrial cogeneration plants. This programs to reduce greenhouse gas emis- dence in the long-run pay-out if you have latest total energy installation features a sions. The US government's Environmental total uncertainty about fuel inputs and biomass-fuelled boiler and a Siemens SST- Protection Agency (EPA) also recently costs, this climate also being a barrier to PAC 800 steam turbine and generator pack- backed the use of output-based standards any major new investments. However, age rated at 80 MW, which will provide all for air permits for new cogeneration, he continued, the energy efficiency of the electrical power and process steam for which will substantially reduce costs of combined heat and power is a competitive the factory and district heating for the emission controls and stimulate cogenera- benefit in a high energy-price environ- neighboring town. tion growth. The US Department of Energy ment. CHP will be helped more than hurt WADEING IN TO MARKET Outside the European arena, markets for (DoE) has set targets to double cogeneration levels to 92 GWe by 2010, while Congress is looking at legislation including by high fuel costs once these have stabilized. In addition, the U.S. power grid is highly congested, especially in urban and DE and CHP are beginning to grow rapidly. highly-populated areas and it s almost im- New gas discoveries off the southeast coast possible to expand it with new corridors or of Brazil, together with some clear incen- additional lines, due to objections by land- tives within the country s new Electricity Law, are providing significant opportunities for new cogeneration investment. WADE, the World Alliance for Decentralized Energy, a non-profit research and promotional organization whose international membership includes Siemens, believes that emerging markets, particularly in Brazil, Russia, India and Mexico, offer better overall prospects for the development of cogeneration and distributed energy systems than OECD countries. Market opportunities include the development of biomass-based systems, especially the exciting potential for cogeneration using A growing number of smaller industries decide to produce their own power: William Grant & Sons Distillery, Girvan, Scotland, who run their own industrial CHP plant. owners and communities. This often leaves distributed generation, and CHP in particular, as the only alternative to meet rising demand for power and power quality. NEW DAWN Although China represents a massive potential market, government-subsidized power has made CHP a less attractive proposition in that country. In contrast, there is now positive backing for cogeneration, both in Europe and at all levels in the USA. Who knows, perhaps a bright new dawn for cogeneration is breaking in the west, rather than the east. Photo top left: Siemens. Photo bottom left and right: Florian Sander

19 V E N T U R E M A G A Z I N E _ M A R C H _ D A T E L I N E _ 1 9 Dateline April 10TH AFRICA OIL & GAS, (UNCTAD/ United Nations Conference on trade and Development) Algiers, Algeria, April PAN AFRICAN POWER CONGRESS & EXPO, Johannesburg, South Africa, April ABTCP (Pulp & Paper), Sao Paolo, Brazil, April IRAN OIL & GAS SHOW, Teheran, Iran, May OFFSHORE TECHNOLOGY CONFERENCE, Houston, USA, May ACHEMA, Frankfurt am Main, Germany, May POGEE 2006, 4TH PAKISTAN OIL, GAS & ENERGY EXHIBITION AND CONFERENCE, Karachi, Pakistan, May INTERNATIONAL COGENERATION, COMBINED CYCLE AND ENVIRONMENT CONFERENCE, Istanbul, Turkey, 30 May 01 June POWER GEN EUROPE, Cologne, Germany, May ELECTRIC POWER, Atlanta, USA,

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